Dear Liz: As a widower who just turned 60, what are the pros and cons of starting my survivor benefit now? My wife passed away at 55, after 20 years of marriage. My lifetime earnings are higher than hers. I am in good health and have not remarried (though I’m open to doing so). Finances are not an issue. I’m debating how long to continue to work. It seems my best Social Security approach is to claim the survivor benefit now, then later (perhaps at age 67 or 70) claim my own benefit. Your thoughts, please?
Answer: If you start any Social Security benefit before your own full retirement age, you will be subject to the earnings test that reduces your checks by $1 for every $2 you earn over a certain limit ($18,240 in 2020). So if you continue to work, it’s often best to delay starting benefits.
Your full retirement age is 66 years and 10 months if you were born in 1959. (It’s 67 for people born in 1960 and later.) Once you reach full retirement age, the earnings test disappears. You could collect the survivor benefit and leave your own alone to grow. Once your benefit maxes out at age 70, you could switch.
I am in a similar circumstance to the individual who wrote you and to which you responded about the survivors benefits question below. Why wouldn’t it be best to take survivors benefits of your deceased spouse from ages 60 to 70, then convert to your own benefit at age 70, assuming that’s the best scenario to collect the most benefits? Even if he is still working and making over the $18,000+ annual earning cap, any monthly amounts withheld over the Annual cap would be added to his own benefit when he collects at age 70. It’s a win win to start collecting on the deceased spouse’s benefit at age 60, assuming one’s own benefit will be more at age 70 than the deceased spouse’s benefit at retirement age of 66+.
You’d want to run your situation through a more sophisticated calculator such as Maximize My Social Security or Social Security Solutions to see the best claiming strategy in your situation. Amounts withheld because of the earnings test might be permanently lost if you switch benefits.